Private firms to compete on same terms as NHS providers

In the past the contracts to run Independent Sector Treatment Centres (ISTCs) have included income guarantees, in order to limit the risk to the companies running them.

This has often resulted in companies being paid for work that was never actually done.

But last week health minister Mike O'Brien said that any future ISTCs would be paid at the same rates and under the same contracts as existing NHS hospitals.

It will be up to PCTs to decide whether to renew existing ISTC contracts, under the new terms.

Dr Hamish Meldrum, chairman of the BMA Council, welcomed the announcement. But he added, ‘‘It's a shame it's taken so long to get an acknowledgement that skewing the playing field in favour of private companies has been unfair and wasteful.'

Up to 16 ISTCs could close when their contracts run out next year.

Guarantees written into the contract will force the NHS to buy back their buildings at a cost of up to £200 million, the DoH has admitted.